EU Takes Aim at Privacy Rules

December 18, 2015

The explosive growth of the “digital age” has been fueled and funded by advertising’s major support, which continues to serve as the economic foundation of the internet and mobile media. Online advertising is growing at a phenomenally rapid pace, and the Internet of Things revolution is projected to provide for even greater advertising opportunities – all driven by the collection and processing of online consumer data. This data regime, however, has now come under renewed scrutiny due to a recent European Union proposal that creates a new framework for how companies can use individuals’ personal information.

On Tuesday, European Union officials reached an agreement on a proposed pan-European data protection regime that would attempt to rationalize the current patchwork of 28 different national laws. The overhaul will have a potentially significant impact on the way companies collect and use data, including for marketing purposes. The proposal is slated to expand substantially the definition of personal data to cover everything from email addresses to any online identifier, such as an IP address. The expansion of personal data definitions will impact EU consent requirements, which are directed to be “unambiguous” for personal data and “explicit” for sensitive categories. Parental consent also will be more expansive than in the U.S., where users under the age of 16 are likely to need to obtain parental consent before using various information services. “Profiling” for the purposes of marketing, defined as the tracking of online data to determine users’ behaviors, may well require explicit consent and will in most cases require a privacy impact assessment. Also, the timing for data breach notification is slated to be on a far more mandatory and accelerated basis than in the U.S.

According to the Wall Street Journal, these provisions “could have serious consequences for online advertising in the region, threatening everyone from ad tech middlemen to publishers to web giants like Google and Facebook.” These steps being taken in Europe could throw into question the current targeted advertising system that is used by a wide range of digital advertisers in the U.S. Targeted advertising provides consumers with valuable information about products and services best suited to their needs. Already through the Digital Advertising Alliance (DAA) self-regulatory programs, consumers have been given extensive control over the collection of their data.

The actions taken by the EU could severely burden the advertising practices of companies that want to advertise in Europe and could have the overall impact of making advertising less effective. We see this as one of the main privacy issues for 2016 and will be covering it at our upcoming Advertising Law & Public Policy Conference. ANA will continue to work with the World Federation of Advertisers (WFA) and others in the advertising industry to ensure that our members are able to successfully and effectively advertise not just in the United States, but in the EU and worldwide.

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